What to Know About Learning Resources, Inc. v. Trump
By Daniel Brouse
February 21, 2026
On February 20, 2026, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump (consolidated with V.O.S. Selections v. United States) that the President cannot use the International Emergency Economic Powers Act (IEEPA) to impose unilateral tariffs.
The Court held that the Constitution gives Congress — not the President — the authority to set tariffs under Article I, Section 8. The decision represents one of the most significant modern limitations on presidential trade authority and reasserts the separation of powers in economic policy.
How the Case Began
The case was originally brought by Learning Resources, a U.S.-based educational toy company, which challenged tariffs imposed under IEEPA. While many large corporations were initially reluctant to confront the administration publicly, the financial impact of the tariffs ultimately led thousands of companies to file lawsuits or refund claims.
An estimated $175 billion in duties were collected under the challenged tariff regime.
Major companies that filed suits or claims include:
- Costco Wholesale – Argued the tariffs were unlawful and sought a full refund to protect consumer pricing.
- Toyota subsidiaries (Toyota Tsusho America and Toyota Tsusho Canada) – Filed ahead of a January 2026 liquidation deadline.
- Revlon – Joined litigation in late 2025.
- Alcoa – Filed for refunds in November 2025.
- Goodyear Tire & Rubber – Sued in December 2025, citing shifting tariff rates on Southeast Asian inputs.
- BYD – Filed in February 2026 seeking refunds on commercial vehicles, batteries, and solar panels.
Following the ruling, additional claims are emerging from states and foreign entities. For example, the Governor of Illinois has publicly demanded approximately $9 billion in refunds tied to costs borne by residents and businesses.
The Two Legal Paths to the Supreme Court
The case reached the Supreme Court through two parallel tracks:
1. U.S. Court of International Trade (CIT)
The CIT has exclusive jurisdiction over most trade disputes. In May 2025, it ruled in V.O.S. Selections that the tariffs were unlawful.
2. U.S. District Court for the District of Columbia
Learning Resources filed its case in federal district court. Although the government sought to transfer it to the CIT, the District Court retained jurisdiction and also ruled the tariffs illegal in May 2025.
The Supreme Court ultimately clarified that the CIT has exclusive jurisdiction over these tariff disputes, vacated the D.C. case, and consolidated authority in the trade court.
What Happens Now?
With the Supreme Court’s constitutional ruling in place, attention shifts back to the lower courts — particularly the CIT — to manage the consequences.
Consolidation at the CIT
All related cases will now proceed in the Court of International Trade.
Resumption of Nearly 2,000 Lawsuits
The CIT had stayed approximately 2,000 company cases while awaiting the Supreme Court decision. Those cases will now resume to determine the specific refund amounts owed.
Refund Mechanics
The Supreme Court did not specify how the estimated $175 billion should be refunded. The CIT must now determine:
- Whether U.S. Customs and Border Protection (CBP) must pay interest
- The timeline for repayment
- Administrative procedures for processing claims
Potential New Litigation
Immediately following the decision, President Trump announced a new 10% global tariff under Section 122 of a different statute. On February 21, 2026, President Donald Trump announced he will increase a newly implemented 10% global tariff to 15%. These tariffs are widely expected to face fresh challenges in the CIT, potentially restarting the legal cycle.
The President has also indicated he intends to contest refund obligations in court for an extended period. If pursued, that strategy could prolong litigation well beyond current political timelines.
Economic and Political Implications
Public polling indicates significant opposition to broad-based tariffs. Analysts estimate that, spread across households, the collected duties equate to roughly $1,000 per person in economic impact.
The combination of refund claims, renewed litigation, and policy uncertainty may have lasting implications for:
- Trade relationships
- Investor confidence
- Executive authority in economic emergencies
- Congressional oversight of tariff power
Why This Case Matters
Learning Resources v. Trump is not merely about tariffs. It is a constitutional decision clarifying the limits of executive power in economic policymaking.
By reaffirming that tariff authority resides with Congress, the Supreme Court reestablished a foundational structural principle: emergency powers cannot be used to override explicit constitutional allocations of authority.
The financial, political, and legal repercussions of this ruling are only beginning to unfold. Before Trump, the global economy was largely oriented toward free trade. Today, the only certainty about Trump’s trade policies is uncertainty. Numerous foreign countries have already indicated they will step back from trade with the U.S. and observe the chaos and instability ahead.